Rent gap between traditional and creative office widens

• The
rent gap between creative and conventional office has accelerated since 2010.
Overall average
office rent has grown by 30
percent while rent for creative product grew by 81 percent over the last seven
years. Surprisingly, Los Angeles has
a modest
supply of creative office accounting for only 23.2 million
square feet, or 12 percent of the total
inventory.

• Tech
and particularly entertainment and
media, have been resolute
in their choice for creative product . Over
the last 24 months, Warner Music Group, Netflix
and Viacom
have leased over 1.2 million square feet as single-user tenants in creative-designed
assets. Additional demand should remain robust not only on the Westside, South Bay and Downtown
where the product is concentrated, but
also expand more broadly throughout
the LA basin. Additional supply may be needed to
accommodate increasing tech migration from northern California seeking
alignment with LA’s entertainment and media industry.​